Jan. 5 (Bloomberg) -- U.S. Representative Bill Flores, a Republican from Texas, talks about the outlook for the new 112th Congress and drilling in the Gulf of Mexico. Flores talks with Peter Cook on Bloomberg Television's "InBusiness." (Source: Bloomberg)

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The Obama administration continued to shake up the agency that oversees oil and natural gas drilling, announcing a plan Wednesday to create separate offices to promote energy development and enforce safety.

The mission of the former Minerals Management Service to promote resource development, maximize revenue and enforce safety regulations had a built-in conflict, Interior Secretary Ken Salazar said. "Those conflicts, combined with a chronic lack of resources, prevented the agency from fully meeting the challenges of overseeing industry operating in U.S. waters," Salazar said.

Wednesday's announcement remakes that agency into the Bureau of Ocean Energy Management , which will be in charge of the development of offshore energy, and the Bureau of Safety and Environmental Enforcement, which will enforce safety regulation. More than a thousand employees from the former agency will be reassigned in the new structures, which are to start operating by Oct. 1. Revenue collection was moved last year to a separate office.

Salazar also announced plans for an advisory committee of academics and representatives from the oil and gas industry and non-governmental organizations that will recommend safety measures. The 13-member safety panel will be led by former Sandia National Laboratory director Thomas O. Hunter, a member of the scientific team that assisted with the capping of the oil-spewing well.

"We are moving forward with this reorganization that has been long in planning based on research," said Michael Bromwich, director of the Bureau of Ocean Energy and Management, Regulation and Enforcement.

The reorganization is being closely watched in Congress. Rep. Doc Hastings (R-Wash.), the House Natural Resources Committee chairman, said splitting MMS "must be more than a symbolic name-change."

With gasoline prices rising and families struggling to make ends meet, the new Bureau of Safety and Environmental Enforcement "must carry out effective oversight of offshore drilling and also ensure that permits for new drilling are issued in a timely manner" without bogging down energy development in red tape, Hastings said.

Outside government, the changes drew cautious praise from some and condemnation from others.

"We like Secretary Salazar's plan to separate planning and leasing for offshore drilling from safety inspections and the enforcement of standards for the industry," said Michael Gravitz , oceans advocate for the group Environment America.

He said the drive to allow companies to lease and drill has trumped safety and enforcement efforts. Salazar and Bromwich worked hard to make drilling safer, Gravitz said, "but the safest drilling is no drilling at all."

Jim Noe, executive director of the Shallow Water Energy Security Coalition, said reorganizing the former MMS is "little more than reshuffling deck chairs as our industry continues to sink."

Noe said shallow-water operators have an outstanding track record spanning 60 years of producing mainly natural gas in the Gulf. But Salazar's regulatory approach to the industry "over the past six months has resulted in a crippling slowdown in the issuance of permits for shallow-water operations," he said.

Bromwich said reorganization is necessary. "The weaknesses that existed . . . are the product of decades of neglect" and "historic failures of leadership," he said.